Merrill Boss Bets On High Profits To Feed Latest Addiction

Merrill Lynch is expected to announce a 28% rise in fourth-quarter net income tomorrow, to $1.78 billion ($1.88/share), bringing their 2006 profit to $6.9 billion, the highest since it was founded* in 1914. Here’s hoping, for ML’s sake, those numbers are on target, because erstwhile penny-pincher E. Stanley O’Neal's spending habits depend on them.

Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal is making acquisitions at the fastest pace in more than a decade to catch up with Goldman Sachs Group Inc. in commodities and Lehman Brothers Holdings Inc. in trading mortgage bonds. Merrill has spent more than $2.6 billion to purchase 17 companies since 2004, including last year's takeovers of mortgage lender First Franklin Financial Corp. and Denver-based Petrie Parkman & Co., which specializes in investment banking for energy companies. O'Neal told shareholders in November that he may make ``bolt-on'' purchases to expand Merrill's brokerage unit, already the nation's biggest. O'Neal took advantage of last year's record earnings to invest in the fastest-growing parts of the securities industry. That's a reversal from 2002, when he took over as CEO and cut 20,000 jobs at the New York-based firm as stock markets slumped.